Starbucks Corp (NASDAQ:SBUX) Earnings Model
Author: Chris Roose, Published: October 24, 2021 Category: Earnings Preview (Prior to the F4Q2021 SBUX Results)
|
Notes From the Model Developer: US Store growth will be slightly slower than currently projected due to further competition from competitors like Dutch Bros and smaller mom & pop shops that seem to have popped up during Covid. This change had little to no effect considering how many US stores already exist. I did not include any change in regard to license stores because I do not see these competitors entering that market. For this reason it will only affect US store growth through additional stores being added each year.
|
| ||
I am expecting politics in Washington to push corporate tax rates higher, currently expecting that move to be up to 25%. I have made this change starting with FY22 and made these changes to the effective tax rate in row 153. This caused enough downward pressure along with a slightly lower than 3-month average estimated P/E of 30x to cause my view to be neutral for Starbucks over the next 12 months.
Valuation: The $108 target price is based on a 30x multiple, slightly below the 3-month average. This was held near the average because I don't see a large change in investor sentiment towards Starbucks happening at this time. No change in corporate tax, inflation, lower consumer spending, competition, and further Covid effects are the largest risks to this model that may change the expected sentiment to change.
Valuation: The $108 target price is based on a 30x multiple, slightly below the 3-month average. This was held near the average because I don't see a large change in investor sentiment towards Starbucks happening at this time. No change in corporate tax, inflation, lower consumer spending, competition, and further Covid effects are the largest risks to this model that may change the expected sentiment to change.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.